Trade Closed: 2008-03-19 11:10
Our remaining position was closed early this morning after the pair rallied on US Dollar strength.
1st Half: +85 pips
2nd Half: +00 pips
Total: +.50% gain
There is still much confusion in the markets, so we will probably continue to see volatility for the time being. USD/CAD is currently trading just above parity. We will sit and wait to see how it reacts and if we see a sustained move one way or another. Stay tuned!
Trade Update: 2008-03-18 11:07
Our trade hit our first profit target this morning as it reached .9900 after Canadian CPI numbers came in a bit hotter than expected. The pair found a bid at that level however, and rallied back up. A portion of our trade was closed at .9900 to lock in some profits and our stop has been moved to break even.
Our position is currently trading around .9960 and with the FOMC interest rate decision coming within the next few hours I expect a lot of volatility and possibly a rally on increase risk appetites in the equities and commodity markets. This may or may not work in our favor…we’ll just have to wait and see…
For now, we will hold our position and see how the rest of the day plays out. Good luck!
Trade Idea: 2008-03-17 18:03
It’s only Monday and we’re already on a wild ride in the global market. Volatility has taken USD/CAD back up to a rising trendline. Will this area hold as resistance ahead of the big FOMC interest rate decision tomorrow?
On the chart, we can see USD/CAD rallying back up and after a brief touch with parity, the pair has held just below the rising trendline drawn on the chart. Stochastics are indicating this short term rally may be out of steam.
The big event this week is the FOMC interest rate decision tomorrow. The Fed has recently pulled out all the stops to prevent a financial meltdown and tomorrow may be no different if they decided to cut 100 basis points. Even if the come with a whimpy 50 basis point cut, that still brings interest rates down to 2.50% in the US versus 3.50% in Canada, making the Loonie that much more attractive. Also, oil has held above $100 a barrell, a positive for capital flows into Canada.
Short USD/CAD at market (.9985), stop at 1.0065, pt1 at .9900, pt2 at .9825
Remember to never risk more than 1% of your account on any single trade. Please adjust position sizes accordingly.
We also have Canadian CPI in the line up for event risk tomorrow, so stay tuned for updates and adjustments. Good luck my friends!